Spending more to win than to lose

NYT profiles the new “entertainment shopping” site Swoopo, in which bidders spend $0.60/bid on to snag deals on bikes, watches, small electronics, and other impulse buys. They report:

This month, a new 40-inch Samsung TV, which normally sells for $1,500, sold for $67.92, and a white LG refrigerator with a price tag of $1,498 went for a cool $77.90.

But there’s an enormous catch:

[Critics say the site preys] on human foibles, like the tendency of people to overlook the small increments of money they spend to pursue alluring discounts. These critics also say that players face long odds in Swoopo’s auctions, where they must compete against people in the United States, Britain and Germany. And they say that Swoopo is making a nice profit on each item when all the bidding fees are tallied. Competing bidders spent a cumulative $2,337 in their losing effort to buy the $1,498 refrigerator, for example.

Absolutely incredible. Price and psychology, dangerously interlinked. The unemployed 27-year-old piping draftsman who’s profiled in the piece confesses that occasionally he’s spent more winning an item than it would’ve cost to buy in a store.

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From NYT this summer, quoting Christine Rosen’s article in The New Atlantis on multitasking: “William James, the great psychologist, wrote at length about the varieties of human attention.[…] To James, steady attention was thus the default condition of a mature mind, an ordinary state undone only by perturbation. To readers a century later, that placid portrayal may seem alien—as though depicting a bygone world. Instead, today’s multitasking adult may find something more familiar in James’s description of the youthful mind: an ‘extreme mobility of the attention’ that ‘makes the child seem to belong less to himself than to every object which happens to catch his notice.’ For some people, James noted, this challenge is never overcome; such people only get their work done ‘in the interstices of their mind-wandering.’” In my case, that description hits rather close to home.

The magical number

From Christopher D. Green’s insanely great archive, "Classics in the History of Psychology" comes George Miller’s famous 1956 paper, "The Magical Number Seven, Plus or Minus Two: Some Limits on our Capacity for Processing Information." Among many wonderful things, the paper gave us the concept of "chunking." Since Miller’s paper draws heavily from information theory as an influence, the classic example of chunking is a man trying to learn Morse code. Miller: “A man just beginning to learn radiotelegraphic code hears each dit and dah as a separate chunk. Soon he is able to organize these sounds into letters and then he can deal with the letters as chunks. Then the letters organize themselves as words, which are still larger chunks, and he begins to hear whole phrases. […] I am simply pointing to the obvious fact that the dits and dahs are organized by learning into patterns and that as these larger chunks emerge the amount of message that the operator can remember increases correspondingly. In the terms I am proposing to use, the operator learns to increase the bits per chunk.” Where’s one of the most vivid places to see chunking at work? A game of chess.

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"[Dr. Elizabeth] Spelke’s renown in psychology is based, in part, on her use of looking-time measures to answer questions not only about perception but also about cognition. Did infants have expectations of how the world worked—and could you tell what those expectations were by determining what surprised them? Spelke and several other researchers […] developed a provocative variation on the preferential-looking scheme, usually called the ‘violation of expectations’ study. These experiments were staged a little like magic shows. Babies sat in a darkened room, watching scenarios of varying degrees of plausibility unfold on a small stage. Spelke, for example, showed the babies a ball rolling along a path with an obstruction in the middle of it. A screen was lowered and then raised to reveal the ball either resting against the obstruction—where it logically should be—or on the other side of it, as though the ball had magically rolled through a solid surface. Spelke found that babies looked longer at the unexpected event." The New Yorker’s Margaret Talbot on Harvard University’s Laboratory for Developmental Studies. See also this incredible image of the famous experiments.

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The weird, wonderful, and somewhat creepy world of Neuro-linguistic Programming (NLP), which may or may not be practiced (and mastered) by foxy bloggerina Arianna Huffington, to wit: “I have a handful of best friends, girls and boys, men and women. Some you would know, like Larry David’s wife, Laurie, and Bill Maher, and some you would not know. I call them my tribe. And when you are in the tribe, you are not judged. You are just loved.”